Anyone living in or near New York City is likely aware of the sharp rise in the selling price for residential real estate over the past 10-years!
Having our business centered here we have watched with nothing short of amazement as any negative impact on property prices stemming from the financial crisis that began around 2007 was relatively short-lived.
Investors, looking for alternative assets as the Federal Reserve pumped money into the financial system pushing interest rates to near 0%, found them here in the form of real property.
In addition, and not any less significant, home affordability rose as interest rates on a 30-year mortgage dropped from 5.81% in 2004 to 3.35% in 2012 making the rent vs buy comparison that much more attractive to the favor of the buy side (particularly as monthly rents soared with rental stock scarce).
Combining these two buying classes the tangible asset class of residential real estate has done very well!
For long-term managers of money whether a personal fortune or OPM there have been few investments over time proven consistently better than real estate and by that measure there are few better markets around the world than the one in New York City!
And to break it down even further there are few if any better markets in New York City than in Manhattan!
Of course not all real estate markets are created equal and some have fared better than others, but the adage ‘Location, Location, Location’ was never truer than it is in NYC with both strong demand for housing by the people who live and work here that’s coupled with the global demand from investors who have helped to push inventory to extremely low levels.
From Douglas Elliman these are some of the 10-year statistics:
For all of the reports prepared by DouglasElliman Real Estate please visit them here.
This article was reprinted at Global Economic Intersection here.Google+